Opinion
44865.
ARGUED NOVEMBER 4, 1969.
DECIDED FEBRUARY 9, 1970.
Action for damages. DeKalb Civil and Criminal Court. Before Judge Mitchell.
Swift, Currie, McGhee Hiers, James T. McDonald, Jr., Clayton H. Farnham, for appellants.
Zachary, Hunter, Zachary Bowden, W. E. Zachary, Sr., for appellee.
While the law implies no warranties as to the quality or condition of an existing new house in favor of a vendee by the vendor-builder, yet the petition here in Count 1 seeks damages for existing latent defects not disclosed to the petitioners but apparent to the defendant who thereby is allegedly guilty of fraud, and states a claim for the relief sought.
(a) Count 2 of the petition seeking relief strictly on an alleged implied warranty in which the contract of sale has merged in a deed fails to state a claim for the relief sought.
(b) A suit based upon damages in the performance of a contract which remains after the purchase of the property by deed by reason of the breach of the special stipulation states a claim for relief. The court erred in dismissing Counts 1 and 3 as shown above.
ARGUED NOVEMBER 4, 1969 — DECIDED FEBRUARY 9, 1970.
This is an action for damages in three counts, arising from the sale by the builder of a defective dwelling. The sale of the dwelling, of necessity, arose out of the sale of realty on which the dwelling was constructed. This appeal is from the trial court's dismissal of all three counts of plaintiff's petition as finally amended. Initially there was a motion to dismiss plaintiffs' case on the pleadings, the plaintiffs in the lower court being the appellants here. Two depositions were presented and not excluded by the court, yet it is not clear that all parties were given a reasonable opportunity to present all materials pertinent to a motion for summary judgment. See Code Ann. § 81A-112 and 81A-156 (Ga. L. 1966, pp. 609, 622, 660; 1967, pp. 226, 231, 238; 1968, pp. 1104, 1106).
Count 1 of the petition as finally amended alleges fraud on the part of the defendant in the sale of the house in that he did not act in good faith but affirmatively attempted to defraud the plaintiffs in utmost bad faith by concealing latent defects known to him and by representing to the plaintiffs that the house was suitable for their occupancy when in fact it was not, and he failed to obtain a final inspection by the DeKalb County building authorities as required by law. The plaintiffs allege certain stated defects were latent at the time of the purchase, the same being: (1) The defendant failed to grade the lot in violation of the DeKalb County Minimum Construction Standards; (2) Knew that waterproofing was not applied to the outside walls of said dwelling which when coupled with the improper grading caused additional seeping in the basement of the dwelling, causing extensive damage, necessitating repairs thereto; (3) Inadequately supported certain cement slabs also in violation of the DeKalb County Minimum Construction Standards, resulting in the cracking of the concrete due to alternate wetting and drying of the clay below said slabs; (4) Used materials in the construction of the dwelling which did not comply with the DeKalb County Minimum Construction Standards, thereby requiring replacement of certain portions of the roof due to the defects therein; and did not act in good faith but affirmatively attempted to defraud the plaintiffs herein by utmost bad faith in concealing the latent defects known to him at the time of the sale of the dwelling but unknown to the plaintiffs, and representing to the plaintiffs that the house was suitable for their occupancy when in fact it was not, and in failing to obtain a final inspection by the DeKalb County Building Authorities as required by law. They sought compensatory and exemplary damages in stated amounts.
Count 2 of the petition alleges a breach of implied warranty by reason of the fact that the builder possessed certain skills which the plaintiffs did not have and that he impliedly warranted the building to be built in a workmanlike manner in compliance with the DeKalb County Minimum Construction Standards and would be fit for the purpose for which it was intended; and they placed full reliance on him to sell them a structure fit for a dwelling; and as a result of the breach of said implied warranty they were damaged in a stated sum.
Count 3 of the petition alleges certain damages in the construction of double doors installed in the basement in place of a single door as the result of a special stipulation in the contract of sale, alleging that the defendant failed to perform the contract in a workmanlike manner, in that he failed to adequately support the brick veneer which remained above the double doors as required by the DeKalb County Minimum Construction Standards, otherwise known as DeKalb County Building Code, and as a result of the inadequate support, cracking has developed in the mortar which must be repaired by the plaintiffs, and the plaintiffs have suffered damage to their dwelling in a stated sum.
This case involves the purchase of real estate on which a residential dwelling was constructed, and as alleged by the plaintiffs, it was to be suitable for occupancy as their home. The pleadings and evidence show that the dwelling was not completed when the contract of sale was entered into, and special stipulations were incorporated in the contract by the parties. While the doctrine of caveat emptor applies to the sale of realty, and there are no implied warranties as to the physical condition of the property or title, and ordinarily a purchaser buys at his own risk, this strict rule has been modified in a number of instances, particularly where fraud has been involved. See Whiten v. Orr Constr. Co., 109 Ga. App. 267, 268 ( 136 S.E.2d 136), where a discussion of such cases of modification is made.
Count 1 of the petition as finally amended alleges a claim of fraud on the part of the defendant in that he allegedly failed to act in good faith but affirmatively attempted to defraud the plaintiffs in utmost bad faith by concealing latent defects known to him. The plaintiffs then set out certain alleged latent defects known to the defendant but unknown to the plaintiffs and which they were unable to see from personal inspection of the property. In reading the depositions of the opposing parties there appears to be considerable conflict as to, (1) the existence of defects in the dwelling; and (2) whether or not they were latent or reasonable and natural which would occur after the construction of any dwelling; and (3) whether or not there has been any fraud on the part of the defendant. While the judge did not state that he considered the depositions in his ruling on the motion to dismiss Counts 1, 2 and 3, as amended, yet it does not matter in our review, since it is clear that Count 1 states a claim for relief as required by Code Ann. § 81A-108 (a) (Ga. L. 1966, pp. 609, 619; 1967, pp. 226, 230), and even if the motion be treated as one for summary judgment and disposed of as provided in Code Ann. § 81A-156 (Civil Practice Act, as amended, supra) the court erred in dismissing Count 1 of the petition. See Whiten v. Orr Constr. Co., 109 Ga. App. 267, supra, and cases cited therein.
But under the authority of such cases as Walton v. Petty, 107 Ga. App. 753 ( 131 S.E.2d 655), and cases cited therein with reference to implied warranties and implied covenants, under Count 2 of this petition, based upon a breach of implied warranty, in that the defendant implied warranted the building to be built in a workmanlike manner in compliance with the DeKalb County Minimum Construction Standards, a claim for the relief demanded is not stated. The doctrine of caveat emptor applies for any sale of land and there is no implied warranty as to the property. See Code § 29-302; McDonough Co. v. Martin, 88 Ga. 675 ( 16 S.E. 59, 18 LRA 343). The court did not err in dismissing Count 2 of the petition.
Count 3 of the petition alleges certain damages in the construction of double doors installed in the basement in lieu of a single door as the result of a special stipulation in the contract of sale. The deposition of the builder shows that this work was to be performed after the closing of the transaction. It thus appears from the evidence that this special stipulation in the contract of sale did not merge in the deed upon the closing of the transaction and the acceptance by the purchaser. Accordingly, the doctrine of caveat emptor does not apply in this instance, and in alleging that the contractor failed to perform his contract in a workmanlike manner, the purchaser states a claim for the relief sought; and in considering the evidence as well as the pleadings, this claim for relief based upon a special stipulation in the sale contract did not merge with the deed when the sale was closed. McKee v. Cartledge, 79 Ga. App. 629 ( 54 S.E.2d 665); Kollen v. High Point Forest, Inc., 104 Ga. App. 713 ( 123 S.E.2d 10); Knight v. Heddon, 112 Ga. App. 847 ( 146 S.E.2d 556). Accordingly, the court erred in dismissing Count 3 of the petition.
Judgment reversed in part; affirmed in part. Jordan, P. J., and Whitman, J., concur.